Global inventories 'scarily thin': Aramco CEO

Spanish Market: Crude oil, Oil products
05/10/26

Global oil inventories are "scarily thin" after seven months of production and shipping disruptions caused by the US-Iran war, Saudi state-controlled Aramco's chief executive Amin Nasser said today.

"The most serious energy supply shock in my career" has left the global oil supply system straining, Nasser said at the Energy Intelligence Forum in London.

"The supply resilience cushion is scarily thin," he said, putting the global oil stock draw at 3bn bl since the start of the war. Replenishing inventories while meeting demand could take up to two years, Nasser said, longer than the 18 months he forecast in early August.

He said a co-ordinated release of oil from inventories "was the last major tool in the box". The G7 last week said it would co-ordinate a release of 100mn bl from oil stocks over the next four months, including a substantial diesel release within 20 days. This appears to be part of a 400mn bl commitment made in March.

"Emergency reserves might buy us a winter," Nasser said today. "They cannot fix long-term supply." He said a full reopening of the strait of Hormuz is essential to relieve the pressure. But the US and Iran have not reached any sort of agreement that would allow this.

Tehran's Islamic Revolutionary Guard Corps (IRGC) has resumed attacks on tankers in the strait of Hormuz and today instructed a tanker transiting the waterway inbound to turn back or be targeted, according to UK Maritime Trade Operations (UKMTO).

By Ben Winkley

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05/10/26

US diesel stocks low as export control threat wanes

Houston, 5 October (Argus) — The waning threat of a ban on US diesel exports offers little relief for a US distillate complex facing peak heating demand just as domestic inventories slump to historical lows and global supplies tighten. US president Donald Trump on 30 September tempered his endorsement of a diesel export ban because of concerns that it could push up gasoline prices, as his administration raised expectations of price relief from new diesel supplies in Europe. Trump said he was still "thinking about" an export ban, but believes the US is in a "good place" because of a recent drop in crude prices and a "tremendous" amount of oil coming out of the strait of Hormuz. US energy secretary Chris Wright expects diesel prices to "move meaningfully down in the coming weeks and days", in part because of additional supplies from Europe. "You will hear announcements from our friends in Europe about new diesel supplies that'll come to the market that'll meaningfully push diesel prices down," Wright says. The G7 announced a 100mn bl oil stocks release on 2 October, to begin immediately. Market participants are closely watching Trump's evolving comments on the possible ban. Such a measure could help rebuild low domestic distillate inventories and improve supply security during the harvesting season and ahead of winter. But limiting exports could weigh on Nymex ultra-low sulphur diesel (ULSD) futures, reduce arbitrage opportunities and pressure refinery margins, potentially diminishing refiners' incentives to maximise distillate production. Trump's latest comments come as supply tightens even further in the US northeast ahead of the peak heating season, in part because of refinery maintenance that started in September and will continue until mid-November at Irving Oil's 320,000 b/d St John refinery in New Brunswick, Canada, one of the largest sources of imported diesel for the region. Ultra-low sulphur distillate inventories in the New York region were the lowest in more than four years at 8.9mn bl in the week to 25 September, more than 37pc below a year earlier. This has boosted demand for deliveries to the region. Gulf coast diesel is moving to the northeast along the Colonial Pipeline as well as arriving by sea, tightening tanker availability, increasing demand for pipeline space and raising transport costs. The arbitrage from the Gulf coast to New York Harbor hit its widest in nearly four years on 29 September, as the Gulf coast ULSD premium to Linden, New Jersey, along the Colonial Pipeline rose to 34.81¢/USG, its highest since November 2022 (see graph). Cracking spreads Some support could come from refinery economics that continue to favour diesel over jet fuel. The Nymex ULSD 1:1 crack spread against WTI crude averaged $105.57/bl over 16-30 September after hitting a historical high of $117.92/bl on 16 September. The US jet fuel crack spread averaged $91.07/bl over the same timeframe (see graph). The stronger diesel margin will probably prompt refiners capable of shifting yields towards distillate production to continue prioritising ULSD over jet fuel during the autumn. Gulf coast diesel prices rose on strong demand and low inventories. ULSD inventories in the region dropped to 35.9mn bl in the week to 25 September, down by 1.4mn bl compared with a year earlier. The region has become a key alternative supplier in the face of lower exports from the Mideast Gulf and Russia. The region's diesel exports surged by 41pc to 1.41mn b/d in September from a year earlier and were the highest for any September since at least 2016, according to oil analytics firm Vortexa. By Eunice Bridges and Craig Ross US crack spreads Colonial Pipeline ULSD arbitrage Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Returning Saudi supply may temper term pricing

05/10/26

Returning Saudi supply may temper term pricing

Singapore, 5 October (Argus) — A swift recovery in Saudi Arabian crude exports has eased supply concerns that pushed benchmark Dubai to a six-month high in September. Asia-Pacific refiners mostly say they expect key Mideast Gulf producers to offer competitive pricing for November-loading cargoes as more prompt crude becomes available. Mideast Gulf crude prices rose sharply in September after drone attacks forced Saudi Arabia to close its 7mn b/d East-West crude pipeline on 10 September, halting exports from the Red Sea port of Yanbu. Concerns of a prolonged supply crunch eased as tanker loadings resumed in earnest from Yanbu around 23-24 September (see graph). Saudi Aramco also moved quickly to increase exports through the strait of Hormuz, selling at least 90mn bl of crude loading at its main Ras Tanura terminal within the Mideast Gulf, either as delivered cargoes or by ship-to-ship transfer off Sohar in Oman. Aramco's trading arm has also increased sales of medium sour Khafji crude. Saudi crude loadings rose to nearly 9mn b/d over 22-28 September, the highest weekly level since late 2022, Vortexa data show. The wave of Saudi sales — together with the steady return of other Mideast Gulf producers' exports to near pre-war levels — has left Asian refiners with plentiful prompt supplies. Chinese refiners , in particular, have been buying in volume. Aramco is likely to keep its term crude prices competitive as a result, Asian refiners say. Aramco typically uses the monthly change in the Dubai month 1-month 3 spread to determine contract pricing for its Asian term customers. Houthi attacks and the Hormuz blockade pushed prompt Dubai to a nearly $20/bl premium to the third-month contract in September, a more than $10/bl increase on August and the highest since the outbreak of the US/Israel-Iran war (see graph). But Aramco may instead temper potential increases to its November pricing as part of efforts to regain market share through encouraging customers to lift higher volumes, Asian refiners say. Some customers say they expect Aramco to raise its Asian prices by up to $2/bl for November-loading Arab Light, while others say Aramco could even keep its prices unchanged on the month, as it did for October cargoes despite general expectations of a larger price increase. European refiners also say Aramco will need to lower November pricing to remain competitive given the prospect of a glut of medium crude in the market. European refiners are eyeing a possible influx of sour crude from the US after the energy department offered to loan 40mn bl from the Strategic Petroleum Reserve in Texas for November and December. Murban mystery Asia-Pacific refiners are also keenly watching how the UAE's state-owned Adnoc will determine the first set of Dubai-linked official selling prices for November-loading exports. The firm had previously set pricing based on the Ifad exchange's Murban futures contracts. Market participants say the change will align Adnoc's crude pricing with that of other Mideast Gulf producers, allowing buyers to make easier comparisons across regional grades. This could prompt Adnoc to also set its November pricing competitively as part of efforts to maintain or gain market share. The UAE's exit from Opec in May has given it the freedom to increase crude production and exports. But most Asian refiners say they have little certainty on how Adnoc might set the differential in formula pricing for Murban, its main export crude, given the shift in methodology. This uncertainty had also discouraged some market participants from offering November Murban cargoes in the September spot trading cycle, market sources say. By YouLiang Chay and Ellanee Kruck Yanbu crude loadings Dubai month 1-month 3 spread Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Brazil's presidential election heads to runoff

05/10/26

Brazil's presidential election heads to runoff

Rio de Janeiro, 4 October (Argus) — Brazil's presidential election will go to a runoff after no candidate secured more than 50pc of valid votes in a first round on Sunday. With 99.8pc of the votes counted, senator Flavio Bolsonaro leads with 47pc, beating incumbent president Luiz Inacio Lula da Silva who secured 45.1pc. They will face off in a second-round vote on 25 October. Lula is seeking a fourth, non-consecutive term at the age of 80, while Bolsonaro is standing in for his father, former president Jair Bolsonaro. The elder Bolsonaro is serving a 27-year sentence under house arrest for attempting a coup after losing the 2022 election to Lula. Polls had suggested the race would be tight but gave Lula a slight edge throughout the campaign. The incumbent campaigned on his legacy of social welfare programs and defense of national sovereignty, while Bolsonaro capitalized on anti-Lula sentiment in the wake of long-standing corruption allegations and voter fatigue with crime and the cost of living. Bolsonaro is expected to emulate much of his father's far-right agenda if elected. He has spoken of revoking a temporary 12pc tax on crude exports that Lula's government added to ease the price impact of the Middle East war. He may have an advantage in the run-off, with votes from a handful of right-wing candidates expected to transfer to him. Bolsonaro's Liberal party performed strongly in legislative and gubernatorial elections also held on Sunday, sweeping 19 of 54 available seats in the senate, to six for Lula's Workers' party. By Constance Malleret Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Opec+ to keep output targets steady in November

04/10/26

Opec+ to keep output targets steady in November

London, 4 October (Argus) — A core group of seven Opec+ producers have agreed to keep their crude production quotas unchanged in November, as the US-Iran war continues to disrupt supplies from several members. Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman said after their monthly virtual meeting on Sunday that they would roll over their October quotas into November. Production in several Mideast Gulf countries has been severely affected by the war and disruptions to shipping through the strait of Hormuz and Bab el-Mandeb strait. This has left the Gulf members of the Opec+ alliance unable to meet their quotas, meaning today's decision is unlikely to affect production in the near term. Opec+ production by members with quotas in August was still around 5.7mn b/d below the pre-war level in February, according to Argus estimates. Although production has risen in recent months as more crude has made it through the southern Hormuz route, ongoing attacks on shipping and infrastructure remain a risk to regional output. The seven producers said they would continue to meet monthly to assess market conditions, with their next meeting scheduled for 1 November. The accompanying meeting of the Joint Ministerial Monitoring Committee (JMMC) reiterated the importance of safeguarding maritime routes and expressed concern over attacks on energy infrastructure. The JMMC said it would next meet on 29 November. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Hormuz crude flows, ship attacks on the rise

02/10/26

Hormuz crude flows, ship attacks on the rise

New York, 2 October (Argus) — Record high tanker freight rates are pushing strait of Hormuz crude flows — and Iranian attacks on tankers — to some of the highest levels since the outbreak of war between Iran and the US. Total Middle East crude oil exports are up by 36pc for the week ending 30 September at 17.92mn b/d, including 12.34mn b/d through the strait of Hormuz, according to vessel information firm TankerTrackers.com. This would place weekly Hormuz crude flows at around 80pc of their levels in February, prior to the joint US-Israeli attacks on Iran, which is estimated by vessel tracking service Vortexa to be around 15.14mn b/d. The US and Iran have not reached any sort of agreement for ending the war, so the risks to ships continue to be as significant as they were earlier in the war when less oil was flowing. But the risks, combined with a limited pool of vessels available to transit Hormuz, has kept freight rates high, incentivizing the dangerous work. The rate for a very large crude carrier (VLCC) to move Middle Eastern crude through Hormuz to Asia-Pacific has been at $34.31/bl since 18 September, its highest level since Argus began assessing the route in November 2016. The spot tanker market is moving from strength-to-strength following the start of the war in Iran, according to Harrys Kosmatos, executive at tanker shipowner TEN, speaking at a forum in New York on Wednesday. He highlighted a deal from earlier in the week for a 2004-built VLCC that a charterer provisionally hired at $2mn per day to transit through the strait of Hormuz. In comparison, a VLCC from the US Gulf coast-China was at $366,704/d on 1 October, per Argus assessments. "You don't even need peace now in Iran, you just need the oil to come out," Robert Bugbee, president of shipowner Scorpio Tankers said. Iran steps up attacks The increased ship traffic has been accompanied by more attacks from Iran, particularly on ships transiting the strait on the southern US-assisted transit route. There were six attacks in the last five days, per the UK Maritime Trade Operations Centre (UKMTO). This includes an attack reported Friday against a tanker exiting the strait which caused a fire onboard. The vessel remains in transit. Iran continues to target crude exports from countries in the Gulf, including the UAE and Kuwait. "Several oil tankers have been hit in the strait of Hormuz in recent days, three of the latest of which are owned or leased by entities in the UAE," according to a statement by the Persian Gulf Strait Authority published by Iranian-government affiliated news agency IRNA on Friday. The Kuwaiti VLCC Kazimah III was hit on 1 October, according to Martin Kelly, former head of advisory at EOS Risk Group, the second Kuwaiti state VLCC hit since 28 September. Since the start of July, 31 of 48 projectile strike incidents reported to UKMTO occurred on the southern US-assisted transit lane. UKMTO acknowledged in its weekly report that there are likely "other projectile strikes occurring that have NOT been reported to UKMTO." By Charlotte Bawol Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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